Unidroit Uniform Law on the International Sale of Goods

Единообразный закон УНИДРУА о международной купле-продаже товаров

(ULIS)

1. The present Law shall apply to contracts of sale of goods
entered into by parties whose places of business are in the
territories of different States, in each of the following cases:
(a) where the contract involves the sale of goods
which are at the time of the conclusion of the contract in the
course of carriage or will be carried from the territory of one
State to the territory of another; (b) where the acts
constituting the offer and the acceptance have been effected in the
territories of different States; (c) where delivery of
the goods is to be made in the territory of a State other than that
within whose territory the acts constituting the offer and the
acceptance have been effected. 2. Where a party to the
contract does not have a place of business, reference shall be made
to his habitual residence. 3. The application of the
present Law shall not depend on the nationality of the parties.
4. In the case of contracts by correspondence, offer
and acceptance shall be considered to have been effected in the
territory of the same State only if the letters, telegrams or other
documentary communications which contain them have been sent and
received in the territory of that State. 5. For the
purpose of determining whether the parties have their places of
business or habitual residences in "different States",
any two or more States shall not be considered to be "different
States" if a valid declaration to that effect made under
Article 11 of the Convention dated the 1st day of July 1964
relating to a Uniform Law on the International Sale of Goods is in
force in respect of them.

Article 2

1. Rules of private international law shall be excluded for the
purposes of the application of the present Law, subject to any
provision to the contrary in the said Law.
Article 3
The parties to a contract of sale shall be free to exclude
the application thereto of the present Law either entirely or
partially. Such exclusion may be express or implied.
Article 4
The present Law shall also apply where it has been chosen as
the law of the contract by the parties, whether or not their places
of business or their habitual residences are in different States
and whether or not such States are Parties to the Convention dated
the 1st day of July 1964 relating to a Uniform Law on the
International Sale of Goods, to the extent that it does not affect
the application of any mandatory provisions of law which would have
applicable if the parties had not chosen the Uniform Law.
Article 5
1. The present Law shall not apply to sales: (a)
of stocks, shares, investment securities, negotiable instruments or
money; (b) of any ship, vessel or aircraft, which is
or will be subject to registration; (c)of electricity;
(d) by authority of law or on execution or distress.
2. The present Law shall not affect the application of
any mandatory provision of national law for the protection of a
party to a contract which contemplates the purchase of goods by
that party by payment of the price by instalments.
Article 6
Contracts for the supply of goods to be manufactured or
produced shall be considered to be sales within the meaning of the
present Law, unless the party who orders the goods undertakes to
supply an essential and substantial part of the materials necessary
for such manufacture or production.
Article 7
The present Law shall apply to sales regardless of the
commercial or civil character of the parties or of the contracts.
Article 8
The present Law shall govern only the obligations of the
seller and the buyer arising from a contract of sale. In particular,
the present Law shall not, except as otherwise expressly provided
therein, be concerned with the formation of the contract, nor with
the effect which the contract may have on the property in the goods
sold, nor with the validity of the contract or of any of its
provisions or of any usage.
Chapter II - General Provisions

Article 9
1. The parties shall be bound by any usage which they have
expressly or impliedly made applicable to their contract and by any
practices which they have established between themselves.
2. They shall also be bound by usages which reasonable
persons in the same situation as the parties usually consider to be
applicable to their contract. In the event of conflict with the
present Law, the usages shall prevail unless otherwise agreed by
the parties. 3. Where expressions, provisions or forms
of contract commonly used in commercial practice are employed, they
shall be interpreted according to the meaning usually given to them
in the trade concerned.
Article 10
For the purposes of the present Law, a breach of contract
shall be regarded as fundamental wherever the party breach knew, or
ought to have known, at the time of the conclusion of the contract,
that a reasonable person in the same situation as the other party
would not have entered into the contract if he had foreseen the
breach and its effects.
Article 11
Where under the present Law an act is required to be
performed "promptly", it shall be performed within as
short a period as possible, in the circumstances, from the moment
when the act could reasonably be performed.
Article 12
For the purposes of the present Law, the expression "current
price" means a price based upon an official market quotation,
or, in the absence of such a quotation, upon those factors which,
according to the usage of the market, serve to determine the price.
Article 13
For the purposes of the present Law, the expression "a
party knew or ought to have known", or any similar expression,
refers to what should have been known to a reasonable person in the
situation.
Article 14
Communications provided for by the present Law shall be made
by the means usual in the circumstances.
Article 15
A contract of sale need not be evidenced by writing and shall
not be subject to any other requirements as to form. In particular,
it may be proved by means of witnesses.
Article 16
Where under the provisions of the present Law one party to a
contract of sale is entitled to require performance of any
obligation by the other party, a court shall not be bound to enter
or enforce a judgment providing for specific performance except in
accordance with the provisions of Article VII of the Convention
dated the 1st day of July 1964 relating to a Uniform Law on the
International Sale of Goods.
Article 17
Questions concerning matters governed by the present Law
which are not expressly settled therein shall be settled in
conformity with the general principles on which the present Law is
based.
Chapter III - Obligations of the Seller

Article 18
The seller shall effect delivery of the goods, hand over any
documents relating thereto and transfer the property in the goods,
as required by the contract and the present Law.
Section I - Delivery of the Goods

Article 19
1. Delivery consists in the handing over of goods which
conform with the contract. 2. Where the contract of
sale involves carriage of the goods and no other place for delivery
has been agreed upon, delivery shall be effected by handing over
the goods to the carrier for transmission to the buyer.
3. Where the goods handed over to the carrier are not clearly
appropriated to performance of the contract by being marked with an
address or by some other means, the seller shall, in addition to
handing over the goods, send to the buyer notice of the consignment
and, if necessary, some document specifying the goods.
Sub-Section I - Obligations of the Seller as Regards the Date and
Place of Delivery

A. Date of delivery

Article 20
Where the parties have agreed upon a date for delivery or
where such date is fixed by usage, the seller shall, without the
need for any other formality, be bound to deliver the goods at that
date, provided that the date thus fixed is determined or
determinable by the calendar or is fixed in relation to a definite
event, the date of which can be ascertained by the parties.
Article 21
Where by agreement of the parties or by usage delivery shall
be effected within a certain period (such as a particular month or
season), the seller may fix the precise date of delivery, unless
the circumstances indicate that the fixing of the date was reserved
to the buyer.
Article 22
Where the date of delivery has not been determined in
accordance with the provisions of Article 20 or 21, the seller
shall be bound to deliver the goods within a reasonable time after
the conclusion of the contract, regard being had to the nature of
the goods and to the circumstances.
B. Place of delivery

Article 23
1. Where the contract of sale does not involve carriage of
the goods, the seller shall deliver the goods at the place where he
carried on business at the time of the conclusion of the contract,
or, in the absence of a place of business, at his habitual
residence. 2. If the sale relates to specific goods
and the parties knew that the goods were at a certain place at the
time of the conclusion of the contract, the seller shall deliver
the goods at that place. The same rule shall apply if the goods
sold are unascertained goods to be taken from a specified stock or
if they are to be manufactured or produced at a place known to the
parties at the time of the conclusion of the contract.
C. Remedies for the seller's failure to perform his obligations as
regards the date and place of delivery

Article 24
1. Where the seller fails to perform his obligations as
regards the date or the place of delivery, the buyer may, as
provided in Articles 25 to 32: (a) require performance
of the contract by the seller; (b) declare the
contract avoided. 2. The buyer may also claim damages
as provided in Article 82 or in Articles 84 to 87. 3.
In no case shall the seller be entitled to apply to a court or
arbitral tribunal to grant him a period of grace.
Article 25
The buyer shall not be entitled to require performance of the
contract by the seller, if it is in conformity with usage and
reasonably possible for the buyer to purchase goods to replace
those to which the contract relates. In this case the contract
shall be ipso facto avoided as from the time when such purchase
should be effected.
(a) Remedies as regards the date of delivery

Article 26
1. Where the failure to deliver the goods at the date fixed
amounts to a fundamental breach of the contract, the buyer may
either require performance by the seller or declare the contract
avoided. He shall inform the seller of his decision within a
reasonable time, otherwise the contract shall be ipso facto
avoided. 2. If the seller requests the buyer to make
known his decision under paragraph 1 of this Article and the buyer
does not comply promptly, the contract shall be ipso facto avoided.
3. If the seller has effected delivery before the
buyer has made known his decision under paragraph 1 of this Article
and the buyer does not exercise promptly his right to declare the
contract avoided, the contract cannot be avoided. 4.
Where the buyer has chosen performance of the contract and does not
obtain it within a reasonable time, he may declare the contract
avoided.
Article 27
1. Where failure to deliver the goods at the date fixed does
not amount to a fundamental breach of the contract, the seller
shall retain the right to effect delivery and the buyer shall
retain the right to require performance of the contract by the
seller. 2. The buyer may however grant the seller an
additional period of time of reasonable length. Failure to deliver
within this period shall amount to a fundamental breached of the
contract.
Article 28
Failure to deliver the goods at the date fixed shall amount
to a fundamental breach of the contract whenever a price for such
goods is quoted on a market where the buyer can obtain them.
Article 29
Where the seller tenders delivery of the goods before the
date fixed, the buyer may accept or reject delivery; if he accepts,
he may reserve the right to claim damages in accordance with
Article 82.
(b) Remedies as regards the place of delivery

Article 30
1. Where failure to deliver the goods at the place fixed
amounts to a fundamental breach of the contract, and failure to
deliver the goods at the date fixed would also amount to a
fundamental breach, the buyer may either require performance of the
contract by the seller or declare the contract avoided. The buyer
shall inform the seller of his decision within a reasonable time;
otherwise the contract shall be ipso facto avoided. 2.
If the seller requests the buyer to make known his decision under
paragraph 1 of this Article and the buyer does not comply promptly,
the contract shall be ipso facto avoided. 3. If the
seller has transported the goods to the place fixed before the
buyer has made known his decision under paragraph 1 of this Article
and the buyer does not exercise promptly his right to declare the
contract avoided, the contract cannot be avoided.
Article 31
1. In cases not provided for in Article 30, the seller shall
retain the right to effect delivery at the place fixed and the
buyer shall retain the right to require performance of the contract
by the seller. 2. The buyer may however grant the
seller an additional period of time of reasonable length. Failure
to deliver within this period at the place fixed shall amount to a
fundamental breach of the contract.
Article 32
1. If delivery is to be effected by handing over the goods to
a carrier and the goods have been handed over at a place other than
that fixed, the buyer may declare the contract avoided, whenever
the failure to deliver the goods at the place fixed amounts to a
fundamental breach of the contract. He shall lose this right if he
has not promptly declared the contract avoided. 2. The
buyer shall have the same right, in the circumstances and on the
conditions provided in paragraph 1 of this Article, if the goods
have been despatched to some place other than that fixed.
3. If despatch from a place or to a place other than that
fixed does not amount to a fundamental breach of the contract, the
buyer may only claim damages in accordance with Article 82.
Sub-Section 2 - Obligations of the Seller as Regards the Conformity
of the Goods

A. Lack of conformity

Article 33
1. The seller shall not have fulfilled his obligation to
deliver the goods where he has handed over: (a) part
of the goods sold or a larger or a smaller quantity of the goods
than he contracted to sell; (b) goods which are not
those to which the contract relates or goods of a different kind;
(c)goods which lack the qualities of a sample or model
which the seller has handed over or sent to the buyer, unless the
seller has submitted it without any express or implied undertaking
that the goods would conform therewith; (d) goods
which do not possess the qualities necessary for their ordinary or
commercial use; (e) goods which do not possess the
qualities for some particular purpose expressly or impliedly
contemplated by the contract; (f) in general, goods
which do not possess the qualities and characteristics expressly or
impliedly contemplated by the contract. 2. No
difference in quantity, lack of part of the goods or absence of any
quality or characteristic shall be taken into consideration where
it is not material.
Article 34
In the cases to which Article 33 relates, the rights
conferred on the buyer by the present Law exclude all other
remedies based on lack of conformity of the goods.
Article 35
1. Whether the goods are in conformity with the contract
shall be determined by their condition at the time when risk
passes. However, if risk does not pass because of a declaration of
avoidance of the contract or of a demand for other goods in
replacement, the conformity of the goods with the contract shall be
determined by their condition at the time when risk would have
passed had they been in conformity with the contract. 2.
The seller shall be liable for the consequences of any lack of
conformity occurring after the time fixed in paragraph l of this
Article if it was due to an act of the seller or of a person for
whose conduct he is responsible.
Article 36
The seller shall not be liable for the consequences of any
lack of conformity of the kind referred to in sub-paragraph d), e)
or f) of paragraph 1 of Article 33, if at the time of the
conclusion of the contract the buyer knew, or could not have been
unaware of, such lack of conformity.
Article 37
If the seller has handed over goods before the date fixed for
delivery he may, up to that date, deliver any missing part or
quantity of the goods or deliver other goods which are in
conformity with the contract or remedy any defects in the goods
handed over, provided that the exercise of this right does not
cause the buyer either unreasonable inconvenience or unreasonable
expense.
B. Ascertainment and notification of lack of conformity

Article 38
1. The buyer shall examine the goods, or cause them to be
examined, promptly. 2. In case of carriage of the
goods the buyer shall examine them at the place of destination.
3. If the goods are redespatched by the buyer without
transhipment and the seller knew or ought to have known, at the
time when the contract was concluded, of the possibility of such
redespatch, examination of the goods may be deferred until they
arrive at the new destination. 4. The methods of
examination shall be governed by the agreement of the parties or,
in the absence of such agreement, by the law or usage of the place
where the examination is to be effected.
Article 39
1. The buyer shall lose the right to rely on a lack of
conformity of the goods if he has not given the seller notice
thereof promptly after he discovered the lack of conformity or
ought to have discovered it. If a defect which could not have been
revealed by the examination of the goods provided for in Article 38
is found later, the buyer may nonetheless rely on that defect,
provided that he gives the seller notice thereof promptly after its
discovery. In any event, the buyer shall lose the right to rely on
a lack of conformity of the goods if he has not given notice
thereof to the seller within a period of two years from the date on
which the goods were handed over, unless the lack of conformity
constituted a breach of a guarantee covering a longer period.
2. In giving notice to the seller of any lack of
conformity, the buyer shall specify its nature and invite the
seller to examine the goods or to cause them to be examined by his
agent. 3. Where any notice referred to in paragraph 1
of this Article has been sent by letter, telegram or other
appropriate means, the fact that such notice is delayed or fails to
arrive at its destination shall not deprive the buyer of the right
to rely thereon.
Article 40
The seller shall not be entitled to rely on the provisions of
Articles 38 and 39 if the lack of conformity relates to facts of
which he knew, or of which he could not have been unaware, and
which he did not disclose.
C. Remedies for lack of conformity

Article 41
1. Where the buyer has given due notice to the seller of the
failure of the goods to conform with the contract, the buyer may,
as provided in Articles 42 to 46: (a) require
performance of the contract by the seller; (b) declare
the contract avoided; (c) reduce the price.
2. The buyer may also claim damages as provided in Article 82
or in Articles 84 to 87.
Article 42
1. The buyer may require the seller to perform the contract:
(a) if the sale relates to goods to be produced or
manufactured by the seller, by remedying defects in the goods,
provided the seller is in position to remedy the defects;
(b) if the sale relates to specific goods, by delivering the
goods to which the contract refers or the missing part thereof;
(c) if the sale relates to unascertained goods, by
delivering other goods which are in conformity with the contract or
by delivering the missing part or quantity, except where the
purchase of goods in replacement is in conformity with usage and
reasonably possible. 2. If the buyer does not obtain
performance of the contract by the seller within a reasonable time,
he shall retain the rights provided in Articles 43 to 46.
Article 43
The buyer may declare the contract avoided if the failure of
the goods to conform to the contract and also the failure to
deliver on the date fixed amount to fundamental breaches of the
contract. The buyer shall lose his right to declare the contract
avoided if he does not exercise it promptly after giving the seller
notice of the lack of conformity or, in the case to which paragraph
2 of Article 42 applies, after the expiration of the period
referred to in that paragraph.
Article 44
1. In cases not provided for in Article 43, the seller shall
retain, after the date fixed for the delivery of the goods, the
right to deliver any missing part or quantity of the goods or to
deliver other goods which are in conformity with the contract or to
remedy any defect in the goods handed over, provided that the
exercise of this right does not cause the buyer either unreasonable
inconvenience or unreasonable expense. 2. The buyer
may however fix an additional period of time of reasonable length
for the further delivery or the remedying of the defect. If at the
expiration of the additional period the seller has not delivered
the goods or remedied the defect, the buyer may choose between
requiring the performance of the contract or reducing the price in
accordance with Article 46 or, provided that he does so promptly,
declare the contract avoided.
Article 45
1. Where the seller has handed over part only of the goods or
an insufficient quantity or where part only of the goods handed
over is in conformity with the contract the provisions of Articles
43 and 44 shall apply in respect of the part or quantity which is
missing or which does not conform with the contract. 2.
The buyer may declare the contract avoided in its entirety only if
the failure to effect delivery completely and in conformity with
the contract amounts to a fundamental breach of the contract.
Article 46
Where the buyer has neither obtained performance of the
contract by the seller nor declared the contract avoided, the buyer
may reduce the price in the same proportion as the value of the
goods at the time of the conclusion of the contract has been
diminished because of their lack of conformity with the contract.
Article 47
Where the seller has proffered to the buyer a quantity of
unascertained goods greater than that provided for in the contract,
the buyer may reject or accept the excess quantity. If the buyer
rejects the excess quantity, the seller shall be liable only for
damages in accordance with Article 82. If the buyer accepts the
whole or part of the excess quantity, he shall pay for it at the
contract rate.
Article 48
The buyer may exercise the rights provided in Articles 43 to
46, even before the time for delivery, if it is clear that goods
which would be handed over would not be in conformity with the
contract.
Article 49
1. The buyer shall lose his right to rely on lack of
conformity with the contract at the expiration of a period of one
year after he has given notice as provided in Article 39, unless he
has been prevented from exercising his right because of fraud on
the part of the seller. 2. After the expiration of
this period, the buyer shall not be entitled to rely on the lack of
conformity, even by way of defence to an action. Nevertheless, if
the buyer has not paid for the goods and provided that he has given
due notice of the lack of conformity promptly, as provided in
Article 39, he may advance as a defence to a claim for payment of
the price a claim for a reduction in the price or for damages.
Section II - Handing Over of Documents

Article 50
Where the seller is bound to hand over to the buyer any
documents relating to the goods, he shall do so at the time and
place fixed by the contract or by usage.
Article 51
If the seller fails to hand over documents as provided in
Article 50 at the time and place fixed or if he hands over
documents which are not in conformity with those which he was bound
to hand over, the buyer shall have the same rights as those
provided under Articles 24 to 32 or under Articles 41 to 49, as the
case may be.
Section III - Transfer of Property

Article 52
1. Where the goods are subject to a right or claim of a third
person, the buyer, unless he agreed to take the goods subject to
such right or claim, shall notify the seller of such right or
claim. Unless the seller already knows thereof, and request that
the goods should be freed therefrom within a reasonable time or
that other goods free from all rights and claims of third persons
be delivered to him by the seller. 2. If the seller
complies with a request made under paragraph l of this Article and
the buyer nevertheless suffers a loss, the buyer may claim damages
in accordance with Article 82. 3. If the seller fails
to comply with a request made under paragraph l of this Article and
a fundamental breach of the contract results thereby, the buyer may
declare the contract avoided and claim damages in accordance with
Articles 84 to 87. If the buyer does not declare the contract
avoided or if there is no fundamental breach of the contract, the
buyer shall have the right to claim damages in accordance with
Article 82. 4. The buyer shall lose his right to
declare the contract avoided if he fails to act in accordance with
paragraph l of this Article within a reasonable time from the
moment when he became aware or ought to have become aware of the
right or claim of the third person in respect of the goods.
Article 53
The rights conferred on the buyer by Article 52 exclude all
other remedies based on the fact that the seller has failed to
perform his obligation to transfer the property in the goods or
that the goods are subject to a right or claim of a third person.
Section IV - Other Obligations of the Seller

Article 54
1. If the seller is bound to despatch the goods to the buyer,
he shall make, in the usual way and on the usual terms, such
contracts as are necessary for the carriage of the goods to the
place fixed. 2. If the seller is not bound by the
contract to effect insurance in respect of the carriage of the
goods, he shall provide the buyer, at his request, with all
information necessary to enable him to effect such insurance.
Article 55
1. If the seller fails to perform any obligation other than
those referred to in Articles 20 to 53, the buyer may:
(a) where such failure amounts to a fundamental breach of the
contract, declare the contract avoided, provided that he does so
promptly, and claim damages in accordance with Articles 84 to 87,
or (b) in any other case, claim damages in accordance
with Article 82. 2. The buyer may also require
performance by the seller of his obligation, unless the contract is
avoided.
Chapter IV - Obligations of the Buyer

Article 56
The buyer shall pay the price for the goods and take delivery
of them as required by the contract and the present Law.
Section I - Payment of the Price

A. Fixing the price

Article 57
Where a contract has been concluded but does not state a
price or make provision for the determination of the price, the
buyer shall be bound to pay the price generally charged by the
seller at the time of the conclusion of the contract.
Article 58
Where the price is fixed according to the weight of the
goods, it shall, in case of doubt, be determined by the net weight.
B. Place and date of payment

Article 59
1. The buyer shall pay the price to the seller at the
seller's place of business or, if he does not have a place of
business, at his habitual residence, or, where the payment is to be
made against the handing over of the goods or of documents, at the
place where such handing over takes place. 2. Where,
in consequence of a change in the place of business or habitual
residence of the seller subsequent to the conclusion of the
contract, the expenses incidental to payment are increased, such
increase shall be borne by the seller.
Article 60
Where the parties have agreed upon a date for the payment of
the price or where such date is fixed by usage, the buyer shall,
without the need for any other formality, pay the price at that
date.
C. Remedies for non-payment

Article 61
1. If the buyer fails to pay the price in accordance with the
contract and with the present Law, the seller may require the buyer
to perform his obligation. 2. The seller shall not be
entitled to require payment of the price by the buyer if it is in
conformity with usage and reasonably possible for the seller to
resell the goods. In that case the contract shall be ipso facto
avoided as from the time when such resale should be effected.
Article 62
1. Where the failure to pay the price at the date fixed
amounts to a fundamental breach of the contract, the seller may
either require the buyer to pay the price or declare the contract
avoided. He shall inform the buyer of his decision within a
reasonable time; otherwise the contract shall be ipso facto
avoided. 2. Where the failure to pay the price at the
date fixed does not amount to a fundamental breach of the contract,
the seller may grant to the buyer an additional period of time of
reasonable length. If the buyer has not paid the price at the
expiration of the additional period, the seller may either require
the payment of the price by the buyer or, provided that he does so
promptly, declare the contract avoided.
Article 63
1. Where the contract is avoided because of failure to pay
the price, the seller shall have the right to claim damages in
accordance with Articles 84 to 87. 2. Where the
contract is not avoided, the seller shall have the right to claim
damages in accordance with Articles 82 and 83.
Article 64
In no case shall the buyer be entitled to apply to a court or
arbitral tribunal to grant him a period of grace for the payment of
the price.
Section II - Taking of Delivery

Article 65
Taking delivery consists in the buyer's doing all such acts
as are necessary in order to enable the seller to hand over the
goods and actually taking them over.
Article 66
1. Where the buyer's failure to take delivery of the goods in
accordance with the contract amounts to a fundamental breach of the
contract or gives the seller good grounds for fearing that the
buyer will not pay the price, the seller may declare the contract
avoided. 2. Where the failure to take delivery of the
goods does not amount to a fundamental breach of the contract, the
seller may grant to the buyer an additional period of time of
reasonable length. If the buyer has not taken delivery of the goods
at the expiration of the additional period, the seller may declare
the contract avoided provided that he does so promptly.
Article 67
1. If the contract reserves to the buyer the right
subsequently to determine the form, measurement or other features
of the goods (sale by specification) and he fails to make such
specification either on the date expressly or impliedly agreed upon
or within a reasonable time after receipt of a request from the
seller, the seller may declare the contract avoided, provided that
he does so promptly, or make the specification himself in
accordance with the requirements of the buyer in so far as these
are known to him. 2. If the seller makes the
specification himself, he shall inform the buyer of the details
thereof and shall fix a reasonable period of time within which the
buyer may submit a different specification. If the buyer fails to
do so the specification made by the seller shall be binding.
Article 68
1. Where the contract is avoided because of the failure of
the buyer to accept delivery of the goods or to make a
specification, the seller shall have the right to claim damages in
accordance with Articles 84 to 87. 2. Where the
contract is not avoided, the seller shall have the right to claim
damages in accordance with Article 82.
Section III - Other Obligations of the Buyer

Article 69
The buyer shall take the steps provided for in the contract,
by usage or by laws and regulations in force, for the purpose of
making provision for or guaranteeing payment of the price, such as
the acceptance of a bill of exchange, the opening of a documentary
credit or the giving of a banker's guarantee.
Article 70
1. If the buyer fails to perform any obligation other than
those referred to in Sections I and II of this Chapter, the seller
may: (a) where such failure amounts to a fundamental
breach of the contract, declare the contract avoided, provided that
he does so promptly, and claim damages in accordance with Articles
84 to 87; or (b) in any other case claim damages in
accordance with Article 82. 2. The seller may also
require performance by the buyer of his obligation, unless the
contract is avoided.
Chapter V - Provisions Common to the Obligations of the Seller and
of the Buyer

Section I - Concurrence between Delivery of the Goods and Payment
of the Price

Article 71
Except as otherwise provided in Article 72, delivery of the
goods and payment of the price shall be concurrent conditions.
Nevertheless, the buyer shall not be obliged to pay the price until
he has had an opportunity to examine the goods.
Article 72
1. Where the contract involves carriage of the goods and
where delivery is, by virtue of paragraph 2 of Article 19, effected
by handing over the goods to the carrier, the seller may either
postpone despatch of the goods until he receives payment or proceed
to despatch them on terms that reserve to himself the right of
disposal of the goods during transit. In the latter case, he may
require that the goods shall not be handed over to the buyer at the
place of destination except against payment of the price and the
buyer shall not be bound to pay the price until he has had an
opportunity to examine the goods. 2. Nevertheless,
when the contract requires payment against documents, the buyer
shall not be entitled to refuse payment of the price on the ground
that he has not had the opportunity to examine the goods.
Article 73
1. Each party may suspend the performance of his obligations
whenever, after the conclusion of the contract, the economic
situation of the other party appears to have become so difficult
that there is good reason to fear that he will not perform a
material part of his obligations. 2. If the seller has
already despatched the goods before the economic situation of the
buyer described in paragraph 1 of this Article becomes evident, he
may prevent the handing over of the goods to the buyer even if the
latter holds a document which entitles him to obtain them.
3. Nevertheless, the seller shall not be entitled to prevent
the handing over of the goods if they are claimed by a third person
who is a lawful holder of a document which entitles him to obtain
the goods, unless the document contains a reservation concerning
the effects of its transfer or unless the seller can prove that the
holder of the document, when he acquired it. knowingly acted to the
detriment of the seller.
Section II - Exemptions

Article 74
1. Where one of the parties has not performed one of his
obligations, he shall not be liable for such non-performance if he
can prove that it was due to circumstances which, according to the
intention of the parties at the time of the conclusion of the
contract, he was not bound to take into account or to avoid or to
overcome; in the absence of any expression of the intention of the
parties, regard shall be had to what reasonable persons in the same
situation would have intended. 2 .Where the
circumstances which gave rise to the non- performance of the
obligation constituted only a temporary impediment to performance,
the party in default shall nevertheless be permanently relieved of
his obligation if, by reason of the delay, performance would be so
radically changed as to amount to the performance of an obligation
quite different from that contemplated by the contract.
3. The relief provided by this Article for one of the parties
shall not exclude the avoidance of the contract under some other
provision of the present Law or deprive the other party of any
right which he has under the present Law to reduce the price,
unless the circumstances which entitled the first party to relief
were caused by the act of the other party or of some person for
whose conduct he was responsible.
Section III - Supplementary Rules Concerning the Avoidance of the
Contract

A. Supplementary grounds for avoidance

Article 75
1. Where, in the case of contracts for delivery of goods by
instalments, by reason of any failure by one party to perform any
of his obligations under the contract in respect of any instalment,
the other party has good reason to fear failure of performance in
respect of future instalments, he may declare the contract avoided
for the future, provided that he does so promptly. 2.
The buyer may also, provided that he does so promptly, declare the
contract avoided in respect of future deliveries or in respect of
deliveries already made or both, if by reason of their
interdependence such deliveries would be worthless to him.
Article 76
Where prior to the date fixed for performance of the contract
it is clear that one of the parties will commit a fundamental
breach of the contract, the other party shall have the right to
declare the contract avoided.
Article 77
Where the contract has been avoided under Article 75 or
Article 76, the party declaring the contract avoided may claim
damages in accordance with Articles 84 to 87.
B. Effects of avoidance

Article 78
1. Avoidance of the contract releases both parties from their
obligations thereunder, subject to any damages which may be due.
2. If one party has performed the contract either
wholly or in part, he may claim the return of whatever he has
supplied or paid under the contract. If both parties are required
to make restitution, they shall do so concurrently.
Article 79
1. The buyer shall lose his right to declare the contract
avoided where it is impossible for him to return the goods in the
condition in which he received them. 2. Nevertheless,
the buyer may declare the contract avoided: (a) if the
goods or part of the goods have perished or deteriorated as a
result of the defect which justifies the avoidance; (b)
if the goods or part of the goods have perished or deteriorated as
a result of the examination prescribed in Article 38; (c)
if part of the goods have been consumed or transformed by the buyer
in the course of normal use before the lack of conformity with the
contract was discovered; (d) if the impossibility of
returning the goods or of returning them in the condition in which
they were received is not due to the act of the buyer or of some
other person for whose conduct he is responsible; (e)
if the deterioration or transformation of the goods is unimportant.
Article 80
The buyer who has lost the right to declare the contract
avoided by virtue of Article 79 shall retain all the other rights
conferred on him by the present Law.
Article 81
1. Where the seller is under an obligation to refund the
price, he shall also be liable for the interest thereon at the rate
fixed by Article 83, as from the date of payment. 2.
The buyer shall be liable to account to the seller for all benefits
which he has derived from the goods or part of them, as the case
may be: (a) where he is under an obligation to return
the goods or part of them; or (b) where it is
impossible for him to return the goods or part of them, but the
contract is nevertheless avoided.
Section IV - Supplementary Rules Concerning Damages

A. Damages where the contract is not avoided

Article 82
Where the contract is not avoided, damages for a breach of
contract by one party shall consist of a sum equal to the loss,
including loss of profit, suffered by the other party. Such damages
shall not exceed the loss which the party in breach ought to have
foreseen at the time of the conclusion of the contract, in the
light of the facts and matters which then were known or ought to
have been known to him, as a possible consequence of the breach of
the contract.
Article 83
Where the breach of contract consists of delay in the payment
of the price, the seller shall in any event be entitled to interest
on such sum as is in arrears at a rate equal to the official
discount rate in the country where he has his place of business or,
if he has no place of business, his habitual residence, plus 1%.
B. Damages where the contract is avoided

Article 84
1. In case of avoidance of the contract, where there is a
current price for the goods, damages shall be equal to the
difference between the price fixed by the contract and the current
price on the date on which the contract is avoided. 2.
In calculating the amount of damages under paragraph 1 of this
Article, the current price to be taken into account shall be that
prevailing in the market in which the transaction took place or, if
there is no such current price or its application is inappropriate,
the price in a market which serves as a reasonable substitute,
making due allowance for differences in the cost of transporting
the goods.
Article 85
If the buyer has bought goods in replacement or the seller
has resold goods in a reasonable manner, he may recover the
difference between the contract price and the price paid for the
goods bought in replacement or that obtained by the resale.
Article 86
The damages referred to in Articles 84 and 85 may be
increased by the amount of any reasonable expenses incurred as a
result of the breach or up to the amount of any loss, including
loss of profit, which should have been foreseen by the party in
breach, at the time of the conclusion of the contract, in the light
of the facts and matters which were known or ought to have been
known to him, as a possible consequence of the breached of the
contract.
Article 87
If there is no current price for the goods, damages shall be
calculated on the same basis as that provided in Article 82.
C. General provisions concerning damages

Article 88
The party who relies on a breach of the contract shall adopt
all reasonable measures to mitigate the loss resulting from the
breach. If he fails to adopt such measures, the party in breach may
claim a reduction in the damages.
Article 89
In case of fraud, damages shall be determined by the rules
applicable in respect of contracts of sale not governed by the
present Law.
Section V - Expenses

Article 90
The expenses of delivery shall be borne by the seller; all
expenses after delivery shall be borne by the buyer.
Section VI - Preservation of the Goods

Article 91
Where the buyer is in delay in taking delivery of the goods
or in paying the price, the seller shall take reasonable steps to
preserve the goods; he shall have the right to retain them until he
has been reimbursed his reasonable expenses by the buyer.

Article 92

1. Where the goods have been received by the buyer, he shall take
reasonable steps to preserve them if he intends to reject them; he
shall have the right to retain them until he has been reimbursed
his reasonable expenses by the seller. 2 .Where goods
despatched to the buyer have been put at his disposal at their
place of destination and he exercises the right to reject them, he
shall be bound to take possession of them on behalf of the seller,
provided that this may be done without payment of the price and
without unreasonable inconvenience or unreasonable expense. This
provision shall not apply where the seller or a person authorized
to take charge of the goods on his behalf is present at such
destination.

Article 93

The party who is under an obligation to take steps to preserve the
goods may deposit them in the warehouse of a third person at the
expense of the other party provided that the expense incurred is
not unreasonable.

Article 94

1. The party who, in the cases to which Articles 91 and 92 apply,
is under an obligation to take steps to preserve the goods may sell
them by any appropriate means, provided that there has been
unreasonable delay by the other party in accepting them or taking
them back or in paying the cost of preservation and provided that
due notice has been given to the other party of the intention to
sell. 2. The party selling the goods shall have right
to retain out of the proceeds of sale an amount equal to the
reasonable costs of preserving the goods and of selling them and
shall transmit the balance to the other party.

Article 95

Where, in the cases to which Articles 91 and 92 apply, the goods
are subject to loss or rapid deterioration or their preservation
would involve unreasonable expense, the party under the duty to
preserve them is bound to sell them in accordance with Article 94.
Chapter VI - Passing of the Risk

Article 96
Where the risk has passed to the buyer, he shall pay the
price notwithstanding the loss or deterioration of the goods,
unless this is due to the act of the seller or of some other person
for whose conduct the seller is responsible.

Article 97

1. The risk shall pass to the buyer when delivery of the goods is
effected in accordance with the provisions of the contract and the
present law. 2. In the case of the handing over of
goods which are not in conformity with the contract, the risk shall
pass to the buyer from the moment when the handing over has, apart
from the lack of conformity, been effected in accordance with the
provisions of the contract and of the present Law, where the buyer
has neither declared the contract avoided nor required goods in
replacement.

Article 98

1. Where the handing over of the goods is delayed owing to the
breach of an obligation of the buyer, the risk shall pass to the
buyer as from the last date when, apart from such breach, the
handing over could have been made in accordance with the contract.
2. Where the contract relates to a sale of
unascertained goods, delay on the part of the buyer shall cause the
risk to pass only when the seller has set aside goods manifestly
appropriated to the contract and has notified the buyer that this
has been done. 3. Where unascertained goods are of
such a kind that the seller cannot set aside a part of them until
the buyer takes delivery, it shall be sufficient for the seller to
do all acts necessary to enable the buyer to take delivery.

Article 99

1. Where the sale is of goods in transit by sea, the risk shall be
borne by the buyer as from the time at which the goods were handed
over to the carrier. 2. Where the seller, at the time
of the conclusion of the contract, knew or ought to have known that
the goods had been lost or had deteriorated, the risk shall remain
with him until the time of the conclusion of the contract:

Article 100

If, in a case to which paragraph 3 of Article 19 applies, the
seller, at the time of sending the notice or other document
referred to in that paragraph, knew or ought to have known that the
goods had been lost or had deteriorated after they were handed over
to the carrier, the risk shall remain with the seller until the
time of sending such notice or document.

Article 101

The passing of the risk shall not necessarily by determined by the
provisions of the contract concerning expenses.
Endnotes